Perineurial-associated brown adipocyte-like cells were rapidly generated during bone morphogenetic protein 2 (BMP2)-induced sciatic nerve remodeling in the mouse. Two days after intramuscular injection of transduced mouse fibroblast cells expressing BMP2 into wild-type mice, there was replication of beta-3 adrenergic receptor(+) (ADRB3(+)) cells within the sciatic nerve perineurium. Fluorescence-activated cell sorting and analysis of cells isolated from these nerves confirmed ADRB3(+) cell expansion and their expression of the neural migration marker HNK1. Similar analysis performed 4 days after BMP2 delivery revealed a significant decrease in ADRB3(+) cells from isolated sciatic nerves, with their concurrent appearance within the adjacent soft tissue, suggesting migration away from the nerve. These soft tissue-derived cells also expressed the brown adipose marker uncoupling protein 1 (UCP1). Quantification of ADRB3-specific RNA in total hind limb tissue revealed a 3-fold increase 2 days after delivery of BMP2, followed by a 70-fold increase in UCP1-specific RNA after 3 days. Expression levels then rapidly returned to baseline by 4 days. Interestingly, these ADRB3(+) UCP1(+) cells also expressed the neural guidance factor reelin. Reelin(+) cells demonstrated distinct patterns within the injected muscle, concentrated toward the area of BMP2 release. Blocking mast cell degranulation-induced nerve remodeling resulted in the complete abrogation of UCP1-specific RNA and protein expression within the hind limbs following BMP2 injection. The data collectively suggest that local BMP2 administration initiates a cascade of events leading to the expansion, migration, and differentiation of progenitors from the peripheral nerve perineurium to brown adipose-like cells in the mouse, a necessary prerequisite for associated nerve remodeling.